In an important decision for employers, the Fair Work Commission (FWC) has upheld an employers’ claim for privilege over investigation documents that were sought by an employee during their unfair dismissal proceedings: Petrunic v Q Catering Limited  FWC 1034.
The applicant to the unfair dismissal proceedings, Ms Petrunic (Applicant), was dismissed from her employment with Q Catering after engaging in unauthorised industrial action. Q Catering sought external legal advice in conducting an investigation into allegations of misconduct, the nature of the investigation process and any consequential disciplinary action for employees who participated in the industrial action.
The legal representatives met with managers of Q Catering and took statements that were then used to draft letters of allegation that were provided to five employees involved in the industrial action, including the Applicant. Q Catering subsequently engaged one of its own employees to conduct the investigation into the allegations.
Fair Work Commission order requiring production of documents
At the request of the Applicant, the Fair Work Commission (FWC) issued an order to Q Catering requiring the production of all documents relating to the investigation into the unauthorised industrial action. In particular, the Applicant sought the statements of managers employed by Q Catering. The Applicant argued that privilege over statements given by managers to the legal representatives was waived, as the statements would have been used to formulate the letters of allegation issued by Q Catering to the relevant employees.
Q Catering maintained that the documents were subject to a claim of legal professional privilege, in circumstances where the documents were prepared for the purpose of obtaining legal advice and/or in anticipation of litigation.
Senior Deputy President Hamberger agreed with Q Catering, finding that all documents consisted of confidential communications between Q Catering and its legal representatives for the dominant purpose of the legal representatives providing legal advice.
Loss of legal professional privilege over statement
During the giving of evidence at the hearing for the unfair dismissal application, counsel for the Applicant requested production of a ‘witness statement’ (which Q Catering asserted was more of a file note in nature rather than a witness statement) in response to evidence given by a witness called by the Applicant. The witness statement had been provided to the legal representatives following the day of the industrial action. During cross-examination, the witness was asked whether he had made any notes of the industrial action, to which he responded that he had not done so, but had given a statement to Q Catering’s legal representatives. When asked what he said to Q Catering’s legal representatives, he replied that it was very similar to the statement that he gave to the investigator.
The Applicant submitted that what the witness described as the ‘initial witness statements’ given by the managers to their legal representatives were not confidential documents and were therefore not subject to privilege. It was further submitted that, in any event, privilege had been waived given that a number of the allegations contained in the letters of allegation given to the five employees came from information provided by witnesses to their legal representatives.
Senior Deputy President Hamberger accepted Q Catering’s objection to the Applicant’s argument and asserted the ‘initial witness statements’ contained very sensitive information that was used (among other things) to make decisions that could lead to disciplinary action against employees of Q Catering. However, the Senior Deputy President found the witness had knowingly and voluntarily disclosed his statement to the legal representatives during cross-examination. In coming to this decision, the case of Divall v Mifsud  NSWCA 447 was relied upon. In that case a witness was cross-examined on a privileged statement and asked to reveal the substance of the privileged statement, which he did, and counsel for the party who called the witness did not object. The Court of Appeal held that privilege had been waived, finding that as counsel for the party calling the witness did not object to the questions, the statement had been "knowingly and voluntarily disclosed to another person”.
It was for these reasons that privilege was waived and Q Catering were ordered to provide a copy of the statement to the Applicant.
Categories of legal professional privilege
The three separate categories of legal professional privilege were considered:
Senior Deputy President Hamberger was satisfied that, in this case, all documents that were requested by the Applicant fell within the scope of ‘advice privilege’ (albeit privilege was waived in respect to a witness statement). All documents consisted of confidential communications passing between Q Catering and its legal representatives for the dominant purpose of Q Catering receiving legal advice with respect to preparing letters of allegations, the nature of the investigation process, and potential disciplinary action. He was also satisfied that the documents were prepared in circumstances where legal proceedings were anticipated.
It was noted that if privilege attaches to a document, that privilege may be expressly or impliedly waived. Senior Deputy President Hamberger considered the key principle underlying the concept of waiver is that the party asserting privilege has acted inconsistently with the maintenance of confidentiality over the lawyer-client communication.
Legal professional privilege enables the protection and non-disclosure of communications between clients, their legal representatives and certain third parties in specific circumstances. It operates to allow and encourage forthright communications between a client and their legal advisors regarding appropriate legal options. This case highlights the importance of employers:
Legal professional privilege is an important protection and has value in enabling businesses to explore and discuss potential legal risks and mitigation strategies without fear of those communications being used against them in the future. It is important, however, to ensure the privilege is established correctly and maintained.
A copy of the decision referred to in this article can be accessed here.
Authors: Michael Selinger & Georgie Richardson
Michael Selinger, Partner
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Stephen Trew, Managing Partner, Sydney
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Charles Power, Partner
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Benjamin Marshall, Partner
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Rachel Drew, Partner
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Published by Michael Selinger, Georgie Richardson